APR Constructions Limited - Saffron Capital

Operations and Maintenance (O&M) Contracts
Typically an operations and maintenance contract is issued for operating and maintaining facilities. This could be in
sectors such as water, highways, buildings and power. The contract specifies routine maintenance activities to be
undertaken at a predetermined frequency as well as break-down maintenance during the contract period. While the
contractor is paid for the routine maintenance based on the quoted rates which are largely a function of manpower,
consumables and maintenance equipment to be deployed at the site, any breakdown maintenance is paid for on a costplus
basis.
Front End Engineering and Design (FEED) Contracts
Ordinarily, FEED work is carried out as a part of a consultancy assignment where the consultant provides FEED data
to the project owner to enable it to take a decision on making a tender for construction. In addition to this, the FEED
is also a prerequisite to enable a contractor to bid for EPC/turnkey projects. A FEED project can be an independent
consultancy project or a part of an EPC/turnkey contract.
Price Preference
In tenders for the projects funded by multilateral agencies such as the World Bank and the Asian Development Bank,
where there is international competitive bidding, generally there is a clause giving a price preference of 7.5% for
domestic Indian bidders. In this case, if the bid by the domestic Indian contractor is 7.5% higher than the lowest
international bid, then the employer has to award the project to the domestic bidder. This would be subject to certain
conditions specific to the project. In case the domestic bidder is in a joint venture with an international bidder, then
the domestic bidder would need to own 51% or more in the joint venture in order to qualify for the preferential
treatment.
Purchase Preference
In government tenders for projects normally less than Rs. 100 crores, there is a purchase preference clause wherein a
tender submitted by a Public Sector Undertaking (“PSU”) will entail 10% price preference over other bidders. In this
case, if the bid by the PSU is 10% higher than the lowest bidder, the employer reserves the right to award the project
to the PSU.
IRRIGATION INDUSTRY - OVERVIEW:
Inland Water resources of the country are classified as rivers and canals; reservoirs; tanks & ponds; beels, oxbow
lakes, derelict water; and brackish water. Other than rivers and canals, total water bodies cover all area of about 7
M.Ha. Of the rivers and canals, Uttar Pradesh occupies the First place with the total length of rivers and canals as 31.2
thousand km, which is about 17 percent of the total length of rivers and canals in the country. Other states following
Uttar Pradesh are Jammu & Kashmir and Madhya Pradesh. Among the remaining forms of the inland water resources,
tanks and ponds have maximum area (2.9 M.Ha.) followed by reservoirs (2.1 M.Ha.).
Most of the area under tanks and ponds lies in Southern States of Andhra Pradesh, Karnataka and Tamil Nadu. These
states along with West Bengal, Rajasthan and Uttar Pradesh, account for 62 percent of total area under tanks and
ponds in the country. As far as reservoirs are concerned, major states like Andhra Pradesh, Gujarat, Karnataka,
Madhya Pradesh, Maharashtra, Orissa, Rajasman and Uttar Pradesh account for larger portion of area under
reservoirs. More than 77 percent of area under beels, oxbow, lakes and derelict water lies in the states of Orissa, Uttar
Pradesh and Assam. Orissa ranks first as regards the total area of brackish water and is followed by Gujarat, Kerala
and West Bengal. The total area of inland water resources is, thus, unevenly distributed over the country with five
states namely Orissa, Andhra Pradesh, Gujarat, Karnataka and West Bengal accounting for more than half of the
country's inland water bodies. (Source: www.wrmin.nic.in)
The schemes for irrigation development are conceived, planned and implemented by the respective State
Governments as per their own priorities as Water being a State subject. Government of India encourages the State
Governments to create additional irrigation potential through early completion of the ongoing major and medium
irrigation projects and taking up surface minor irrigation schemes in special category States, tribal and drought prone
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